Buying a house can be both a wonderfully happy experience but it can also be terrifying too. Most people when buying a home are looking for something specific a certain amount of rooms or a style of home or even the size of a yard. Most people go looking for a home loan based on what they make at work or what the pay for rent.
When looking to make a purchase as large as a home you also need to take into consideration your heating costs, any repairs that need to be made, if it’s a handy man’s special and whether you can you really afford to fix it up- regardless of the future potential. Also, you need to take a look at your other expenses , even if the loan company does not consider it child support.
Do you have children? Do you pay for child support or day care? Car payments and car insurance and even the distance from the house you want to buy to your job. Will this make your commute more therefor will you pay more in gas that comes out of your pocket to get to work.
These small details may seem trivial in the big scheme of buying a house, but they are all costs you pay out and they add up. You also need to greatly consider your credit cards if you have any medical bills and regular monthly expenses as well like food and power. What about your extras? Do you want or use a cell phone pay for the Internet and cable TV. Not all of these smaller expenses are always calculated into your monthly expenses by the loan company but again they add up.
Keeping in mind that having a little extra money in the bank if an emergency comes up is also a good plan. If you lose your current job or are hurt and unable to work could you afford the rent payment you have now? If the answer is no you most likely could not pay a mortgage payment especially if it higher than your current rent and usually they are.
Banks will also change you late fee’s that a landlord may be more willing to look past. Banks also depending on the type of loan you apply for may raise your mortgage payment a significant amount, as is in a Balloon Payment. If you stay at your current job and your mortgage company informed you that next month your payments would start being 100 to 150 a month higher, could you afford it?
If you are a married or partnered couple, and you are basing what you can afford on two peoples income, this can be a real problem as well. If one of you loses a job or has to take leave unpaid for some reason could you afford your current payments? Could you make all payments on your own either one of you and a higher mortgage payment?
Buying a home is a big decision and should not be jumped into until you have looked at all possibilities and all of your financial aspects. If you default on your mortgage or foreclose your credit will be ruined for a long while, and you will still be out of a place to live.
In most cases when a person falls a month behind for some unforeseen reason the loan company will send you a bill or statement wanting 2 months in full with late fees. Could you afford to do that? They will in-turn continue to add more fees to this balance if you can not pay.
If you would be in trouble in your current situation if you were out of work or if your partner had to take leave for even a happy time like having a baby then you should reconsider buying a house as this time. All of these factors will help you determine if buying a home is right for you right now and can you afford this life changing purchase.